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How to Handle an Estate’s Debts

Almost every estate has some form of debt. Despite the persistence of a deceased person’s creditors, it is important to understand that unless a person signed as an original borrower, repayment of the debt is not a personal responsibility, and Florida law prohibits creditors from demanding payment from someone who is not legally obligated to pay the debt.

Florida probate laws require the decedent’s personal representative to take steps to ensure that the estates' debts are paid from estate funds at the proper time and in the right manner.

Notify all creditors of the estate

The personal representative must make a diligent effort to give notice of probate to known creditors and to creditors that are reasonably ascertainable. Florida law requires you to send this notice within 60 days of your appointment as personal representative.

You can find most creditors by forwarding the deceased's mail so you receive all the bills. You must also use other sources — such as searching the personal records of the deceased — to find any creditors that do not send bills. Once notified, creditors have only three months to file a claim against the estate.

File objections to claims

The personal representative may object to a creditor's claim. Objections can dispute the amount or existence of a debt. If an objection is made, the creditor must file a separate lawsuit to pursue the claim. A creditor does not have authority to pursue debt collection from the personal representative personally nor from the decedent’s heirs.

Pay legitimate debts of the estate

The estate's liability for debts is limited to the balance due at the moment of the decedent's death. A personal representative files a Proof of Claim for the small and ordinary debts of the estate, such as utility bills, taxes and expenses related to the administration of the estate. The Proof of Claim states that the estate intends to pay the debt.

Keep in mind that the personal representative may not make distributions to beneficiaries until all claims are paid or otherwise settled.

Taking these steps can prevent harassment from creditors and future legal issues. An experienced Florida probate attorney can provide a clear explanation of the probate process and options and guide a personal representative through the entire process.

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